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You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 12 percent Use Appendix B for an
You are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 12 percent Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods Project X (Videotapes Project Y (Slow-Motion of the Weather Report) Replays of Commercials) (516,000 Investment) ($36,000 Investment) Year Cash Flow Year Cash Flow 1 $ 8,000 1 $ 18,000 2 6,000 2 11,000 7,000 3 12,000 4 4 14,000 5.600 a. Calculate the profitability Index for project X (Do not round intermediate calculations and round your answer to 2 decimal places.) Profitability index b. Calculate the profitability index for project Y (Do not round intermediate calculations and round your answer to 2 decimal places.) Profitability index 2 c. Which project would you select based on the profitability index? O Project O Project Y
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